Oman Block 36

In September 2011, APEX was awarded a 100% working interest and the operatorship of Block 36 in the Sultanate of Oman, a large exploration block in the southern part of the prolific Rub al Khali petroleum basin of the Saudi Arabian peninsula, with an area of 18,500 km2 (4.6 million acres or 199 townships).

Block 36 is highly underexplored with only one shallow and two deep wells drilled previously, Al Hashman and Burkanah. Each deep well had hydrocarbon shows with over 40 meters of Silurian source rock. The Silurian is one of the main source rocks that generated oil for the giant fields in Saudi Arabia, such as Ghawar. There are several potential reservoir units in the Paleozoic units, below and above the source rock. Geochemical modelling indicates that much of the Block is in the oil window for hydrocarbon maturity.

The structural framework, consisting of deep-seated northeast-southwest horsts and grabens, is very similar to the framework found in the northern Rub al Khali basin, in Saudi Arabia, where most of the major fields produce from Paleozoic plays. The reservoirs identified in the two deep wells drilled in Block 36 are the same as those documented onshore Saudi Arabia and Qatar.

In September 2013, APEX concluded a farm-out agreement with the Norwegian company, DNO International, in return for a full carry on: 1) geological and geophysical work; 2) the reprocessing of 4,000 km of seismic; 3) the acquisition of 1,000 km of new high-resolution 2D seismic; and 4) completion and testing of two deep exploration wells.

On the basis of the reprocessed and newly acquired seismic, APEX and its partner identified a number of prospects and numerous exploration leads. The reserve size of the prospects and leads ranges from 50 to 250 million barrels.

The first exploration well under the farm-out, Hayah-1, was drilled by DNO in May 2016 in the previously undrilled western portion of the Block, reaching a total depth of 3010m. DNO has elected not to drill the second exploration well on Block 36, concurrently announcing a US$300 million bid to acquire Gulf Keystone Petroleum. The Oman Ministry of Oil and Gas has approved DNO’s withdrawal and APEX will again hold a 100% interest and operatorship in the Block. To date, Apex and its partner have invested more than $US 31 million in the exploration effort on the Block.

Based on the important geological insights provided by the Hayah well, APEX has developed a new and promising structural model of the prospectivity of the Block, firming up the potential of certain of the leads and identifying several promising new plays.

2014 and 2015: Acquisition, processing and interpretation of over 1,000 km of new good-quality 2D seismic

April-May 2016: Drilling of the first stratigraphic exploration well, Hayah-1, to a depth of 3010 m with the aim to gather stratigraphic information and tie the newly acquired seismic on this previously undrilled part of the block.

What’s Next?

The work completed during the past four years has dramatically de-risked the block, and identified the areas where chance of exploration success is highest. APEX currently plans to acquire high-resolution seismic over two of the larger prospects (with combined reserves of over 300 million barrels) and prepare for the drilling of the next exploration wells.